Vermont has so far escaped the arrival of giant data centers, but developers have begun “kicking tires or sniffing around,” according to top Vermont utility lawyer who spoke to lawmakers in February.
Lawmakers are trying to get in front of the possible arrival of data centers, which have begun querying the state as the Trump administration pushes for the development of data centers, fueled by the rise of artificial intelligence and cryptocurrency.
The Legislature is considering two new bills: in the House, the Vermont Sustainable Data Centers Act, or H. 727, would make sure future data centers are properly sited with environmental protections while minimizing the impact to state ratepayers. In the Senate, S. 205 could place a moratorium on the facilities until state regulators study the impacts of the facilities in Vermont, an idea endorsed by Sen. Bernie Sanders, I-Vt., on the federal level.
“If states do not define their own rules, decisions will increasingly be made elsewhere,” said Rep. Laura Sibilia, I-Dover, while introducing her house bill in February. She said her bill would not prohibit data centers or discourage economic activity, but regulate the factory-sized developments that can strain local electric grids, raise customers electric bills, and cause environmental and noise pollution in local communities. “This bill is about having this conversation now before proposals arrive, not after commitments have already been made.”
Lawmakers are hoping to create a framework for these facilities before they’re sited instead of playing catch-up after they arrive. Data centers can create thousands of temporary construction jobs, but the facilities only require a couple dozen employees once built. Instead, economic stimulus can come from property tax revenue, especially in Vermont as the state’s population declines and state leaders struggle to figure out how to add more housing and attract more businesses.
“We have this fear of change, and my fear is rising electric rates with a lack of demand in the region and a lack of opportunities in Vermont,” said Kerrick Johnson, commissioner of the Vermont Public Service Department. “I’m not saying this (data centers) is wonderful, I’m saying it presents an opportunity.”
‘It all came down to power’
The first known attempt to bring a large-scale data center to Vermont was in St. Albans last year when Sean Adkins, then town manager, worked with a developer to bring in one of two planned projects — 8-12 megawatts or 50 megawatts — to town. The larger facility could have created about 1,000 temporary construction jobs and 20 permanent jobs, Adkins said, but those plans fell through because connecting to the electric grid would have cost around $30 million.
“It all came down to power,” Adkins said. “It was going to cost just too much money to build a substation that would have allowed the project to move forward.”
Adkins came to Vermont from Virginia, now known as Data Center Alley for the roughly 150 large-scale data centers in the state, comprising about 35% of the world’s total. The St. Albans project fell through, and he’s since moved to Rutland, where he’s the executive director of Rutland Development Authority.
“I wouldn’t be doing my job if I wasn’t trying to bring projects like that to Rutland,” Adkins said of data centers.
There are at least three traditional data centers in Chittenden County, which combined use about five megawatts of energy, according to Maria Royal, legislative counsel, who spoke to the House Committee on Energy and Digital Infrastructure in February.
But bills in front of the Legislature instead look at large-scale data centers, those requiring 20-100 megawatts of power. On the smaller end, that’s enough energy for 15,000 homes, requiring about one million gallons of water per day to cool the servers, or roughly the water usage of up to 4,000 households. Those buildings are about 140 acres, or two-and-a-half large supermarkets, Royal said.
Candace Morgan, director of regulatory and government affairs at Green Mountain Power, said that with the correct size and location, data centers could actually spread out the electric load and drive down costs for electric customers.
Morgan said her utility studied adding 50-200 megawatts of additional power that might be required to run a data center at specific locations — in New Haven next to a VELCO substation, in Williston next to GlobalFoundaries campus, near the former granite quarry in West Rutland and in Vernon adjacent to the former Vermont Yankee site. Those locations, which have properties closer to large energy sources, could potentially lower residential electric bills, she said.
But others are worried about increasing costs to customers. Right now, data centers use about 4% of the nation’s electric supply, but by 2030, data centers are expected to require more than a tenth of the nation’s power supply. Sen. Peter Welch, D-Vt., joined other federal lawmakers urging New England’s electric grid, known as ISO-NE, to protect ratepayers but requiring data centers to pay for their own electricity, including upgrades to the grid likely required to manage the growing load.
While New England has the highest electricity rates in the country, that would be unlikely to deter data centers, according to Mark Sciarrotta, general counsel for the Vermont Electric Power Company, a utility that distributes power to other utilities.
“Data centers really don’t care about the rates that much because they’re making so much money at these things it’s not their biggest concern,” Sciarrotta told lawmakers.
Inquiries from data developers
States introduced 70 bills meant to regulate data center build out in the 2025 legislative session, according to Alex McWard, senior policy specialist with the energy program at the National Conference of State Legislatures, a bipartisan organization.
“There is some opposition to this kind of legislation due to concerns that it will set too strict of oversight regulations that could drive data centers to locate in other states with less rigid requirements,” McWard said.
Morgan said Green Mountain Power, the state’s largest utility, has had queries from developers.
“We’ve had a couple inquiries,” Morgan told the House Energy and Digital Infrastructure Committee. “As the overall landscape is shifting, there is a lot of speculation and a lot of thinking out there about where else they’re going to show up.”
Johnson said while data centers could spread costs across customers and fund grid investments, the downsides were similar to any type of industrial development with impacts on water, land and noise for nearby communities.
But data centers have “made great leaps forward” when it comes to lowering their community impact, said Adkins in an email.
“In a hypothetical scenario they (data centers) would take great efforts towards beautification and to have as small of a noticeable impact as possible,” Adkins said.
Correction: A previous version of this story misspelled the name of Alex McWard.
